What is Solv Protocol?

Solv Protocol is a Bitcoin ecosystem staking protocol designed to unlock the financial potential of Bitcoin assets through liquidity consensus infrastructure. By utilizing its staking abstraction layer, SolvBTC, and SolvBTC.LSTs (liquid staking tokens), users can seamlessly integrate Bitcoin into the DeFi ecosystem, earning diversified yield opportunities without sacrificing liquidity.

Solv Protocol was founded in early 2021, initially focusing on decentralized finance innovation through financial NFT technology, and later shifting its focus to unlocking the decentralized financial potential of the Bitcoin ecosystem. The protocol is developed by Offchain Labs, supported by cryptocurrency venture capital firms such as dao5 and Tandem. It currently boasts over 1 million users, with 24,665 BTC staked and a TVL (Total Value Locked) of $2.051 billion.

Why is Solv protocol Needed?

For a long time, Bitcoin has been regarded as a strong store of value, consistently making up over 50% of the total market capitalization of cryptocurrencies, valued around $2 trillion. However, due to a lack of cross-chain compatibility and available financial tools, its utility within the Web3 ecosystem has been limited, with over $1 trillion of BTC sitting idle:

1. Unlike Ether, which benefits from the DeFi ecosystem built on its PoS (Proof of Stake) mechanism, Bitcoin lacks high-quality native staking solutions. About 28% of ETH’s total supply is staked (34 million/120 million), and around 29% of staked ETH is on Lido (10 million/33 million). In contrast, only 2.5% of Bitcoin’s total supply needs to be staked to achieve a TVL similar to that of Lido.
2. Bitcoin liquidity in DeFi is fragmented, with liquidity spread across Layer 1, ETH Layer 2, and BTC Layer 2 solutions. Over 80 projects are expanding Bitcoin’s utility, competing for a share of liquidity. Solv Protocol addresses these challenges by positioning itself as the liquidity layer for Bitcoin, working with multiple chains and DeFi protocols to aggregate liquid Bitcoin yield tokens and integrate liquidity into the BTCFi ecosystem.

Main Products of Solv Protocol

SolvBTC: Bitcoin Reserve Token

SolvBTC is the core component of the Solv Protocol. It is a Bitcoin-backed reserve token, pegged 1:1 to BTC. SolvBTC aims to standardize Bitcoin and unify it across various chains, platforms, and channels, enabling Bitcoin liquidity to flow seamlessly between chains.
For users, Bitcoin holders can deposit their BTC into the Solv Protocol and convert it to SolvBTC. This token represents their Bitcoin holdings and serves as a gateway to other DeFi opportunities.
By holding SolvBTC, users can:

• Transfer assets freely across blockchains such as Ethereum, BNB Chain, Avalanche, Arbitrum, Base, BOB, Mantle, and Merlin.
• Seamlessly participate in the cross-chain DeFi ecosystem.
• Access liquidity and yields on multiple platforms without worrying about inefficiencies or high transaction costs.

SolvBTC.LSTs: Liquid Staking Tokens

Similar to Ethereum’s staking tokens, SolvBTC.LSTs allow Bitcoin holders to maintain liquidity while staking their assets. In traditional staking, assets are locked and cannot be used for other purposes. LST solves this by issuing staked asset-mapped tokens, meaning LSTs can be used in other applications. Solv users can stake their SolvBTC to earn LST, allowing them to continue earning staking rewards while utilizing the assets in DeFi platforms (such as liquidity pools or decentralized exchanges).

Staking Abstraction Layer (SAL)

Staking Bitcoin presents unique challenges:

• Cross-chain complexity: Staking Bitcoin often involves cumbersome cross-chain transactions, making it difficult for users to participate.
• Limited programmability: Unlike Ethereum, Bitcoin lacks native smart contract capabilities, limiting the ability to create complex Proof of Stake (PoS) protocols.
• Liquidity issues: Bitcoin holders often find it challenging to maintain liquidity while participating in staking, hindering broader participation.

These issues make it difficult for Bitcoin holders to earn staking rewards while keeping liquidity, which is why Solv Protocol has designed the Staking Abstraction Layer (SAL):
The Staking Abstraction Layer is the core infrastructure of the Solv Protocol. It abstracts the complexity of staking Bitcoin across multiple ecosystems and provides Bitcoin holders with a unified interface. With SAL, users can access a range of yield-generating strategies across different blockchains while holding their BTC’s liquid representation — SolvBTC.
By integrating with various DeFi platforms and ecosystems, SAL simplifies the process for Bitcoin holders to diversify their yield strategies while maintaining their BTC investment.

Funding Background

The project has raised approximately $24 million across 4 private rounds, with 28.86% of the genesis token supply already sold:

• The project raised around $1 million at a valuation of $20 million.
• The project raised around $4.5 million at a valuation of $45 million.
• The project raised around $6.6 million at a valuation of $80 million.
• The project raised around $11.7 million at a valuation of $200 million.

Solv protocol Tokenomics

Token Utility:

SOLV is the native utility token of the Solv Protocol:

• Governance: Vote on network governance decisions by holding/staking SOLV.
• Staking: Earn protocol emissions by staking on Solv’s staking abstraction layer.
• Fee Discounts: Enjoy fee discounts on the Solv Protocol, including redemption fees for SolvBTC.

Token Distribution:

The maximum supply of $SOLV tokens is 9,660,000,000, with an initial total token supply of 8,400,000,000 (86.96% of the max supply).

The distribution is as follows based on the maximum supply:

• Megadrop: 6.09%
• Community Airdrop: 7.39%
• Team & Advisors: 11.30%
• Community Rewards & DAO Treasury: 15.65%
• Community Rewards (External Partners): 7.39%
• Ecosystem Development: 7.08%
• Business Development: 3.48%
• Vesting Voucher Holders: 0.87%
• Private Sale Investors: 25.10%
• Liquidity: 2.61%
• Bitcoin Reserve Offering: 13.04%

Gate.io Now Supports $SOLV Spot Trading